When comparing actual revenue to budgeted revenue, which presentation is most meaningful?

• A. Show budgeted amounts by 12 equal monthly installments.
• B. Show budgeted amounts in the months when revenue or expense occurs.
• C. Ignore timing and compare totals.
• D. Only compare at year-end.

Answer: (B)

The key idea is to align the budget with when revenue is actually earned in each period. Presenting budgeted amounts in the months when revenue or expenses occur lets you see, for every month, whether actual revenue matches expectations, and it reveals seasonal patterns and timing variances that matter for cash flow and planning. If you instead spread the budget evenly across all months, you smooth out those peaks and dips, hiding when performance deviates. Comparing totals while ignoring timing loses the period-by-period insight, and waiting until year-end prevents timely management of issues.